While HGTV may make it seem like you can just buy an ugly, old house, have renovations done quickly and sell the newly upgraded home immediately for a healthy profit – there’s much more to it than that. Here are five things you never knew about flipping houses.
You must adopt the flipper’s mantra:
Your new mantra should be, ‘do the math.’ Figure out how much house you can afford and make sure you include a healthy renovation budget that includes a sizable buffer that can absorb unexpected expenses. Also, be sure to consider operating costs like property taxes, insurance and utility bills. If you always let the number lead the charge on how much you can afford to renovate, you’ll be much less likely to find yourself in a stressful situation where your budget is stretched too thin.
There are tons of people involved:
It takes a village to raise a child and it takes an army to renovate a flip house. Throughout the renovation process, you’ll be working with electricians, plumbers, building material suppliers, general contractors, bankers, real estate attorneys, CPAs, insurance agents and a variety of other experts. By bringing in experienced, licensed and bonded pros to help you through the construction part of the project, you’ll be able to tackle it with confidence. When you’re ready to sell, consider using HomeBay to get the legal and real estate support you need and to save a ton of cash on commission.
Repairs are part of the process:
One mistake that novice house flippers make is not making the right repairs. You can’t walk into a home and expect to deal exclusively with cosmetic issues, especially with an older home. There may be infrastructure fixes that need to be done in order to make the home safe and habitable. Make sure you get the home carefully inspected before you sign on the dotted line so you aren’t surprised by unexpected costs later int he process.
The neighborhood is as important as the house (if not more so):
Home shoppers aren’t just looking for a home that meets their needs, they’re looking for a neighborhood with access to shops, freeways and great schools. Before you invest in a property, it is so critical that you spend some time researching it’s surrounding area to make sure it’s a desirable location that will attract buyers willing to spend what you’re trying to sell the home for. Use this post as a guide on how to identify a good neighborhood to invest in.
Consider each of these points and use them as a guide to ensure your success as a real estate flipper.